Delphi CEO: GM approved faulty switch design

Michael Millikin, executive vice president and general counsel with General Motors Co, from left, Mary Barra,CEO of GM, and Rodney O'Neal, CEO and president of Delphi Automotive PLC, switch name cards as they arrive at a hearing in Washington, D.C., U.S., on Thursday.

Delphi Automotive CEO Rodney O'Neal plans to tell a Senate panel today that General Motors Co. was responsible for approving a faulty ignition switch that has been linked to at least 13 deaths.

O'Neal, in testimony planned before a U.S. Senate panel, said the company made "the switch that GM approved and wanted."

"GM knowingly approved a final design that included less torque than the original target," O'Neal said in prepared written testimony he will present to members of the Senate subcommittee. "In our view, that approval established the final specification."

It's the first time an executive at Delphi, which was formerly owned by GM, has publicly commented on the faulty switches and a related recall crisis that has rocked GM for months.

So far, GM has attributed 13 deaths and 54 crashes to the specific defect, in which the ignition switch can slip from the "run" to the "accessory" position, causing the engine to stall, airbags to not deploy, and a loss of power brakes and power steering.

O'Neal said Delphi has four manufacturing lines operating to make replacement ignition switches under the GM recall. He said Delphi has shipped more than 1 million new switches and is on track to deliver more than 2 million by the end of August.

GM's top lawyer also spoke publicly for the first time at the hearing about the company’s recall of 2.6 million vehicles for faulty ignition switches.

Mike Millikin, GM’s general counsel, told the subcommittee that the automaker has reorganized its legal department in recent months and changed the way lawsuits involving deaths and injuries are handled. GM also has hired an outside law firm to review its litigation practices, he said.

The Senate panel also heard from Kenneth Feinberg, the lawyer who is administering a compensation plan for crash victims on behalf of GM.

Feinberg testified first and was followed by a panel of Millikin, GM CEO Mary Barra, O'Neal and lawyer Anton Valukas.

Valukas, who joined Barra at a House of Representatives hearing in June, wrote a 325-page report detailing why GM failed to recall the vehicles with bad switches for more than a decade after engineers first learned of problems. Today’s hearing is being conducted by the Senate Committee on Commerce, Science & Transportation’s consumer protection subcommittee.

Millikin is expected to face particularly pointed questions over how his department settled numerous legal claims linked to the switches beginning in 2006. At least five of the 15 employees that GM dismissed for their role in the situation were lawyers.

Sen. Claire McCaskill, D-Mo., chair of the subcommittee, opened the hearing by questioning how "on earth did general counsel Michael Milliken keep his job" in light of the Valukas report.

She described "tragic management failures" at the company and said GM workers have also been "the victims of outrageously incompetent management."

In prepared remarks submitted to the Senate committee, Millikin says he knew nothing about the defect until early February, about a week before the first recall. “Had I learned about it earlier, I would have taken action earlier,” he says in the remarks.

The Valukas report says GM settled cases for as much as $5 million without informing Millikin, in accordance with GM’s policies at the time. Millikin says that he has since ordered his staff to bring any settlements or trials involving a death or serious injury to him for review and that any open engineering issues related to the cases will be looked into.

Delphi made the switches at a plant in Mexico.

Documents released by the House committee and reviewed by Valukas for his report show that a now-fired GM engineer, Ray DeGiorgio, approved a switch design that he knew fell short of GM’s specifications. A Delphi engineer notified DeGiorgio in 2002 of subpar test results and asked how to proceed, but DeGiorgio said to make no changes because he didn’t want to risk delaying the launch of the 2003 Saturn Ion.

GM later used the same switch on the Chevrolet Cobalt. It says crashes linked to the switch resulted in at least 13 deaths and 54 injuries. A weak spring in the switch allowed the key to slip out of the “run” position, turning off the engine and disabling power steering, brake assist and airbags.

Feinberg, whom GM has authorized to determine victim payouts without its oversight, plans to accept claims from Aug. 1 through Dec. 31.

GM faces federal and state criminal investigations into the delayed recalls.

Congress and the Department of Transportation’s inspector general are also examining the National Highway Traffic Safety Administration’s handling of the recalls to determine how the agency could have better tracked and identified the defective switches.